Management

Manage Expectation Through Collaboration

Effective communications at every stage of the client relationship will help ensure that you keep clients rather than watch them walk out the door dissatisfied.

Without clients there is no reason to be a lawyer. Lawyers don’t practice law, they serve clients. It's essential that the client knows what the lawyer is doing, and that the client approves of the tactics to be taken to achieve the client's goals. If clients do not believe that a lawyer is serving their best interests, they will take their business elsewhere. Effective lawyers find out not only what clients need, but also what they want. The skills of a lawyer and the way in which services are delivered to the client must be in tune with what the client wants and needs to have.

There are four stages or levels of client expectations, each defining progressively more complete integration and understanding in the legal services relationship:

Level One: Satisfaction. This is the minimum threshold of client expectations in a legal services relationship and is synonymous with communication. Law firms that don’t communicate with their clients to learn what clients want, how they want to receive it, and what the clients' future needs will be will have dissatisfied clients who soon leave.

Level Two: Exceeding expectations. This goes beyond mere satisfaction. Of course, for the next matter, the client’s expectations would be higher. And, if the lawyer performs at this level, the client will be satisfied. No longer exceeding expectations. This may represent a communications failure by the lawyer.

Level Three: Earning loyalty. The standard of this level is time, where the firm maintains client relationships measured in years and even decades. Communication is the foundation here as well – sometimes clients contact the law firm first when new needs arise, other times their lawyer offers a new service or idea that the client hadn’t expected.

Level Four: Collaboration. This is the culmination of all three levels. Lawyer and client work together to assess needs and develop a proactive, interactive law approach, making recommendations to each other about actions and decisions that are mutually beneficial.

The specifics of what defines a collaborative relationship will be different for each client, but every lawyer can do much to shape such a relationship, and thereby manage client expectations successfully, by using the following tactics.

Start on the Right Foot

It is a fundamental business and professional necessity that lawyers have a signed engagement letter for a new client, stating each party’s responsibilities for making the engagement a success. The first key to meeting the client’s expectations is to incorporate all essentials in the engagement letter, by obtaining as much information as possible about the goals and desires of the client. Such information would cover parties, issues, anticipated strategies, desired outcomes and how much the client wants to pay. Going through this process of detailing and negotiating to prepare the engagement letter should prevent situations where clients have unrealistic expectations or demands, or believe that the firm’s estimates – whether of time or outcome or costs – are ironclad guarantees .

Avoid Unreasonable Clients

Discussing engagement terms will frequently uncover the client that will in the future express irritation with delay, who will chronically complain about everything, who will demand constant or instant attention, or who expects unrealistic or abnormal hand-holding. Beware of clients who cannot or will not agree to what they want their lawyer to accomplish. Telltale warning signs of future problems are clients who cannot articulate what they want to achieve, suggest that they know better than the lawyer what needs to be done, nitpick over budgets or insist that their matter is “life and death.” Such clients will often be future sources of last minute complaints or emergencies that at best are irritating and at worst can result in errors under pressure.

Be Reasonable, Not Cheap

The seller of any service must understand costs, set profit targets and gauge market demand. The fee decision ultimately is a matter of the seller’s choice, but the buyer – the client – must not only agree to but also understand the fee. Clients may expect the best possible results for the least possible cost. Help them to understand Rule of Professional Conduct 1.5, which states that, “a lawyer shall not make an agreement for, charge, or collect an unreasonable fee.” Deciding a reasonable fee involves answering certain questions. Is the amount of the fee proportional to the value of the services performed? Do the lawyer’s skill and experience justify the fee? Does the client understand the amount and nature of the fee and consent to it? Do not get onto the slippery slope of letting the client dictate what the fee should be. If the fee should be low, then is $200 per hour, for example, too high? If so, is $150 per hour too high? The lawyer’s true obligation is not to be cheap, but to be fully committed to a collaborative client relationship that builds trust over the long term. That way, clients see the lawyer as valuable, not expensive.

Consider a Performance Guarantee

No lawyer can ethically guarantee a result. To do so comes under Rule of Professional Conduct 7.1’s prohibition of false or misleading communication, which the ABA’s commentary says includes “lead[ing] a reasonable person to form an unjustified expectation” about results. However, lawyers can guarantee a certain degree of effort – which does not violate the code, because it deals with factors within the lawyer’s own control. Such a “guarantee” reduces clients’ feelings of risk, so that they feel comfortable moving ahead with an engagement. Establishing a budget at the start of an engagement can do this by showing clients that their lawyers are sensitive to their needs and giving the client a sense of what to expect. It’s only a short step from this level to guaranteeing satisfaction with the level of service and offering to make adjustments in the fee if necessary if the client were dissatisfied. Of course, don’t make this guarantee without being prepared to stand behind (and in front of) the effort made.

Visit and Listen

Not enough law firms ask their clients " how am I doing?” As a result, many lawyers, unfortunately, never figure out that their client is unhappy. Sending simple, regular status reports can do much to communicate with clients and show what is being done for them. However, status reports only convey information from the lawyer to the client. Far more important for managing client expectations is to find out what clients themselves think, and the best way to do that is to visit the client periodically. Far too often lawyers are apprehensive about what to say or do in making such visits, but the real goal is to get clients to talk about their business and to listen to what they are saying. Managing client expectations is possible only when those expectations are clear. When clients get the chance to talk about their plans and objectives, they begin to think of their lawyer as a long-term friend. When asked questions about their business in an open, non-judgmental way, clients will answer frankly because they are addressing what is most important to them. Clients want to speak about themselves but they appreciate the lawyer’s respect in taking the trouble to learn more about them. It creates a win-win dynamic that builds mutual confidence and collaboration.

Provide Solutions

Law firms can get ahead of client expectations by offering something that competitor firms don't or can't, and creating something new that clients need or want. This is what marketers call a unique selling proposition (USP). The USP is a way for the firm to demonstrate value, not just represent cost. Providing solutions gets attention – and gets rewarded. Clients may send out an RFP that signals they are looking for their current firms to do something to justify continuing the relationship. A firm can establish its USP by going outside the RFP and suggesting ways of managing an IP portfolio more effectively, offering to submit electronic invoices that itemize and detail services provided, demonstrating how to pare back litigation discovery costs by reducing depositions, or showing how to use extranet and knowledge management technology for sharing information more effectively. This gets away from competing on price, moving client expectations away from “what does it cost me” toward “what does it do for me.”

Build Trust and Loyalty

Being a qualified lawyer is not the key to managing client expectations. The very first Rule of Professional Conduct (1.1) asserts that “a lawyer shall provide competent representation to a client.” But competence is actually a pretty low benchmark. Clients see lawyers as competent. Based on a skill level, clients typically can’t tell the difference among lawyers. Each lawyer with a law degree and license from the State is assumed to be as competent as the next lawyer.

The lawyer’s true obligation toward what clients expect is to be fully committed to a collaborative relationship that builds trust over the long term. Communicate regularly with clients. Demonstrate a clear understanding of their values as individuals and (if appropriate) as organizations. Seek out their opinions, ask them what they want to accomplish, explain the reasons behind the advice they receive. Such collaborations don’t just manage expectations – they shape expectations and builds the trust and loyalty that are essential to an enduring relationship.

About the Author

Edward Poll, J.D., M.B.A., CMC, is a strategic law firm planner who helps lawyers increase their revenue, improve their profitability and enhance their satisfaction with the practice of law. He blogs at www.lawbizblog.com.